They are owned by individuals for purpose of renting space to those who need it for storage of their goods. They are conveniently situated near terminals eg seaports an airport, railway station etc. It facilitates movement of goods in and out of warehouse and mostly used by importers and exporters. There are services offered to the goods stored in this warehouses e.g. grading, packaging, preparing export samples etc. The goods are also insured against loss/damage as a result of fire. Goods can be sold while still here and the new owner don’t have to move the goods.
Advantages of public warehouses
- They are an investment opportunity for their owners.
- Acts as a source of employment.
- Goods stored here can be sold without their physical movement from the warehouse.
- Traders don’t have to construct warehouse since they can rent space to store their goods.
- Goods are insured against risks e.g. fire and theft.
- A trader may get a short term loan from the warehousing firm by using the goods as security.
- It is in general less expensive- Fixed costs of a warehouse are distributed among many users. Therefore, the overall cost of warehousing per unit works out to a lower figure.
- They are usually strategically positioned and easily available.
- Adequately flexible to meet most space requirements, for several plans are available to suit the requirements of different users
- The costs of public warehousing can be easily and exactly ascertained, and the user pays only for the space and services he uses.
- Enough space to handle peak requirements.
Disadvantages of public warehouses
- Storage charges levied by the public warehouse operations are relatively high.
- The hirer might get poor services or miss space during peak seasons due to the stiff competition for the same facilities.
- The process of receipt and issuance of goods may be long and complicated due to the large number of clients.
- The hirer does not have complete authority over his own goods.
- Damage/loss of goods may occur since the owner is not there to supervise them.
- They are Unevenly distributed.
- One is required to pay other charges if you extend your storage time.